Won-Dollar Exchange Rate Hits New High at '1192.3 Won'... Will It Surpass 1200 Won?

[Asia Economy Reporter Park Jihwan] As the dollar continues to strengthen, the won-dollar exchange rate hit a new high of 1192 won. There are also forecasts that the won-dollar exchange rate could rise to the 1200 won range by the end of the year.

On the 6th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1192.3 won, up 3.6 won from the previous trading day. The won-dollar exchange rate surpassing 1190 won is the first time in about 1 year and 2 months since August 4 last year, when it was 1194.1 won.

The day before, the won-dollar exchange rate also closed at 1188.7 won, exceeding the previous high. Except for only two days since the 16th of last month, the exchange rate has been on an upward trend every trading day.

The sharp rise in the won-dollar exchange rate is attributed to the rapid increase in U.S. Treasury yields and the strength of the dollar amid concerns over inflation and caution regarding the normalization of U.S. monetary policy. Recently, factors increasing volatility in the domestic stock market, such as the U.S. federal government debt ceiling and the possibility of a resumption of the U.S.-China trade dispute, have been reflected, leading to a contraction in foreign investors' investment sentiment toward risk assets.

Experts expect the dollar's strength to continue until the end of this year. There is an analysis that if the tapering (reduction of asset purchases) issue materializes in November, the pressure for dollar strength will intensify further.